Standard Chartered : Full Year - Annual Report (25 February 2021, PDF)

Annual Report 2020

Supporting our clients, colleagues and communities

Here for good

Strategic report

Standard Chartered is a leading international banking group

Our heritage and values are expressed in our brand promise, Here for good. Our operations reflect our purpose, which is to drive commerce and prosperity through our unique diversity.

Contents

Strategic report

• 02 Who we are and what we do

• 06 Our response to COVID-19

• 10 Group Chairman's statement

• 13 Group Chief Executive's review

• 16 Market environment

• 20 Business model

• 24 Our strategy

• 29 Client segment reviews

• 34 Regional reviews

• 38 Group Chief Financial Officer's review

• 47 Group Chief Risk Officer's review

• 54 Stakeholders and responsibilities

• 72 Non-financial information statement

• 73 Underlying versus statutory results

• 77 Alternative performance measures

• 78 Viability statement

• 80 Directors' report

• 133 Directors' remuneration report

• 178 Risk review and Capital review

• 284 Financial statements

• 426 Supplementary information

About this report

Sustainability reporting

We adopt an integrated approach to corporate reporting, embedding non-financial information throughout our Annual Report.

More information is also available in our Sustainability Summary at sc.com/sustainabilitysummary

Alternative performance measures

The Group uses a number of alternative performance measures in the discussion of its performance. These measures exclude certain items which management believes are not representative of the underlying performance of the business and which distort period-on-period comparison. They provide the reader with insight into how management measures the performance of the business.

For more information please visit sc.com

Responding to COVID-19

In 2020, we committed to providing $1 billion in not-for-profit loans to help finance companies that supply goods and services in the battle with COVID-19. We also created a $50 million Global Charitable Fund to provide emergency support, and longer-term assistance, for the communities most impacted by the pandemic. Find out more about our responses to COVID-19, and how we have supported our clients, colleagues and communities on pages 6 to 9.

$1 billion

Our COVID-19 not-for-profit loan pledge

Read more about our activities on page 6, and for information about total lending to date, see page 63

$50 million

Our COVID-19 Global Charitable Fund

Read more about our activities on pages 8 and 57

b

Delivering our strategy

We have continued to make good progress against the strategic priorities we laid out in February 2019. As we accelerate our strategy, we have refined our focus onto four strategic priorities and three enablers (pages 26 and 27). We believe this new framework will enable us to focus on the key areas needed to transform our bank. We measure our progress against Group key performance indicators (KPIs), a selection of which are below, as well as client KPIs, some of which can be found on pages 29 to 32. Our Group KPIs include non-financial measures reflecting our commitment to sustainability, focusing on sustainable finance, being a responsible company and promoting inclusive communities. Our 11 Sustainability Aspirations, aligned to the UN Sustainable Development Goals (page 54), provide tangible targets to drive sustainable business outcomes.

Throughout this report, we use these icons to represent the different stakeholder groups for whom we create value.

Clients

Regulators and governmentsInvestorsSuppliers

Society

Employees

Read more on page 23 and pages 55 to 71

Financial KPIs

Return on tangible equity

3.0%

340bps Underlying basis

0.9%

390bps Statutory basis

Common Equity Tier 1 ratio

14.4%

60bps

Above our target range of 13-14%

Total shareholder return

(34.6)%

Non-financial KPIs

Diversity and inclusion: women in senior roles

29.5%

1%

Sustainability Aspirations met or on track

78.4%

Other financial measures

Operating income

$14,765m

3%

Underlying basis

$14,754m

4%

Statutory basis

Profit before tax

$2,508m

40%

Underlying basis

$1,613m

57%

Statutory basis

Earnings per share

36.1cents

39.6 cents Underlying basis

10.4cents

46.6 cents

Statutory basis

14.7ppt

Unless another currency is specified, the word 'dollar' or symbol '$' in this document means US dollar and the word 'cent' or symbol 'c' means one-hundredth of one US dollar.

All disclosures in the Strategic Report, Directors' Report and the Risk Review and Capital Review are unaudited unless otherwise stated.

Unless the context requires, within this document, 'China' refers to the People's Republic of China and, for the purposes of this document only, excludes Hong Kong Special Administrative Region (Hong Kong), Macau Special Administrative Region (Macau) and Taiwan. 'Korea' or 'South Korea' refers to the Republic of Korea. Greater China & North Asia (GCNA) includes Mainland China, Hong Kong, Japan, Korea, Macau and Taiwan; ASEAN & South Asia (ASA) includes Australia, Bangladesh, Brunei, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Philippines, Singapore, Sri Lanka, Thailand and Vietnam; Africa & Middle East (AME) includes Angola, Bahrain, Botswana, Cameroon, Cote d'Ivoire, Egypt, The Gambia, Ghana, Iraq, Jordan, Kenya, Lebanon, Mauritius, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Sierra Leone, South Africa, Tanzania, the United Arab Emirates (UAE), Uganda, Zambia and Zimbabwe; and Europe & Americas (EA) includes Argentina, Brazil, Colombia, Falkland Islands, France, Germany, Ireland, Jersey, Poland, Sweden, Turkey, the UK and the US. Within the tables in this report, blank spaces indicate that the number is not disclosed, dashes indicate that the number is zero and nm stands for not meaningful. Standard Chartered PLC is incorporated in England and Wales with limited liability, and is headquartered in London. The Group's head office provides guidance on governance and regulatory standards. Standard Chartered PLC. Stock codes are: LSE STAN.LN and HKSE 02888.

01

Strategic report
Who we are	Our purpose is to drive commerce and prosperity
through our unique diversity. Our businesses
and what we do	serve four client segments across four regions,
supported by nine global functions1.
Our client segments	Local

1.

Retail Banking

Serving more than nine million individuals and small businesses.

Operating income

2.

Commercial Banking

Supporting more than 43,000 local corporations and medium-sized enterprises across Asia, Africa and the Middle East.

Operating income

$5,013m $5,013m $1,409m $1,438m

Underlying basis Statutory basisUnderlying basis Statutory basis

Global

3.

Corporate & Institutional Banking

Serving more than 5,000 large corporations, governments, banks and investors.

Operating income

4.

Private Banking

Helping nearly 7,000 clients grow and protect their wealth.

Operating income

$7,214m $7,225m $540m $540m

Underlying basis Statutory basisUnderlying basis Statutory basis

5. Central & other items

Operating income

$589m

Underlying basis

$538m

Statutory basis

Guiding and supporting our businessesGlobal functions

Human Resources

Maximises the value of our investment in people through recruitment, development and employee engagement.

Legal

Enables sustainable business and protects the Group from legal-related risk.

Technology & Innovation

Responsible for the Group's systems development and technology infrastructure.

Risk

Responsible for the sustainability of our business through good management of risk and ensuring that business is conducted in line with regulatory expectations.

Our client-facing businesses are supported by our global functions, which ensure our Group operations run smoothly and consistently

Operations

Responsible for all client operations and ensures meeting their needs is at the heart of our operational framework. The function's strategy is supported by performance metrics, standards and practices aligned to client outcomes.

Group CFO

Made up of seven teams: Finance, Treasury, Strategy, Investor Relations, Corporate Development, Supply Chain, and Property. The leaders of these functions report directly to the Group Chief Financial Officer.

Corporate Affairs, Brand & Marketing

Manages the Group's communications and engagement with stakeholders to protect our reputation and promote our brand and services.

Group Internal Audit

An independent function that helps the Board and executive management protect the assets, reputation and sustainability of the Group.

Conduct, Financial Crime and Compliance

Partners to enable sustainable business by delivering the right outcomes for our clients and markets, by driving the highest standards in conduct, compliance and fighting financial crime.

1 These pages report on our structure as it was in 2020. For an overview of how our structure has changed, refer to page 21

02